Depression prolongs financial suffering

12/02/2010

Despite having left the recession, new figures suggest that the UK is still in a 'depression' with a sizeable debt burden.

The latest report from the National Institute of Economic and Social Research (NIESR) has shown that, while the UK economy is growing slowly, there are still difficult times ahead.

This is reflected in the record number of personal insolvencies in 2009 with no downturn in quarter four, as The Insolvency Service reports a rise of over 25 per cent in Individual Voluntary Arrangements (IVAs) and Scottish Trust Deeds compared to the same quarter of 2008.

Looking at the growth of the country's gross domestic product (GDP), the study found that output grew by 0.4 per cent in the three months to January 2010.

These are evident in the latest reports from the Office for National Statistics (ONS), which found that the unemployment rate in the UK was 7.8 per cent towards the end of 2009.

With an increase of 29,000 in the number of people who have been unemployed for more than 12 months, a lack of income could prove a major hurdle for many families.

Director of EuroDebt Kevin Still commented: "The unemployment and personal insolvency figures are the tip of the iceberg, as millions of people have suffered loss of income or reduced disposable income, some to a point where they are facing serious debt problems, but aren't insolvent.

"We expect to see a continued rise in consumers starting a recognised debt solution, like a Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA), Debt Relief Order (DRO) or bankruptcy."

Posted by Jim Mead

Tags; Current UK Economy,

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